Airbnb Risks Government Wrath by Turning Homes Into Restaurants

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In tens of thousands of cities around the world, Airbnb has transformed home owners into unofficial innkeepers. Now it’s flirting with the idea of making them amateur restauranteurs.

Though the company is saying little about this experiment, Reuters reports that Airbnb is inviting hosts in San Francisco to hold dinner parties for strangers and charge them a fee. And a Google search turns up these listings for upcoming meals. It’s unclear whether these are part of the same program. But either way, Airbnb appears to be thinking about moving into the dining room. Because of Airbnb’s reach, that move could end up becoming popular. But it also promises to bring down the same wrath from regulators that its room-sharing service has attracted.

The original premise of Airbnb was basically: “I’m going away for the weekend. Would you like to rent my place?” Whether or not that’s still the prevailing version of room rentals on Airbnb has caused all sorts of trouble with city governments across the globe. But even more provocative is the idea of Airbnb specifically creating marketplaces for other services that don’t fit the model of selling what would otherwise sit idle. The move into meals seems more like Airbnb aspiring to become the connective tissue of offline life in general–and more like a direct shot at the concept of government regulation itself.

‘Completely Illegal’

In a recent post on Medium titled “Shared City,” Airbnb CEO and co-founder Brian Chesky opined about a new golden age of urban living, a city where “people become micro-entrepreneurs, and local mom and pops flourish once again,” where “space isn’t wasted, but shared with others,” where “the economy implicitly runs along rails built by Airbnb.”

“Cities are the original sharing platforms,” he wrote. “They formed at ancient crossroads of trade, and grew through collaboration and sharing resources. But over time, they began to feel mass produced. We lived closer together, but drifted farther apart. But sharing in cities is back, and we want to help build this future.”

‘We lived closer together, but drifted farther apart. But sharing in cities is back, and we want to help build this future.’

Chesky is talking about room-sharing, but he also seems to be reaching for a whole lot more. The company has never been shy about wrapping room rentals in an idealistic rhetoric of connection and community fostered by the internet. And it’s possible that dining is a first step toward realizing a more expansive vision. Airbnb declined to discuss its food service ambitions, but it wouldn’t be surprising, from a philosophical or a business perspective, if Airbnb was trying to become more than just a way to rent a room. It also won’t be surprising if they face serious resistance.

Regulators already claim that renting out rooms for short-term stays amounts to running an illegal hotel. That hasn’t stopped Airbnb from becoming wildly popular, and politicians have sometimes been reluctant to resist this popularity. But moving into the restaurant business would likely tip the balance back against the company. According to SF Weekly, San Francisco’s head of food safety said that Airbnb hosts selling food without a permit would be “completely illegal.” The San Francisco Department of Public Health’s Richard Lee told the paper that the city could fine hosts up to $3,000 for offering meals to paying guests.

Although Chesky says Airbnb is committed to supporting local small businesses, that support starts to look questionable once you start creating a marketplace for unlicensed food service that competes with existing restaurants that have suffered through considerable red tape to get up and running. Unlike empty rooms, serving food for money isn’t really leveraging a resource that would otherwise go to waste. It’s more like staking a claim to the idea that people shouldn’t have to endure that red tape in order to connect, even if those connections involve a commercial transaction.

Break First, Fix Later

The kind of intimate capitalism that comes from dining with paying strangers might be Airbnb’s idea of fostering community. But if so, it’s an idea built on a kind of kumbaya libertarianism. “We’re all good people. We can just trust each other to do the right thing,” the idea seems to go. “And if someone turns out to be not so great, the bad reviews will weed them out.” But no marketplace is ever that tidy, as the short history of the so-called sharing economy has already shown.

In a piece against what she calls “Big Sharing,” journalist Susie Cagle sums up the way the collaborative consumption industry idealizes itself. “Renting a room on Airbnb or catching an Uber,” Cagle writes, “is an act of civil disobedience in the service of a righteous return to human society’s true nature of trust and village-building that will save the planet and our souls.” She calls this spin “an ahistoric utopia” that, among other things, obscures the dynamics of inequality into which these companies are injecting themselves, inequalities she argues that supposed sharing can exacerbate or at least help to entrench.

‘Renting a room on Airbnb or catching an Uber is an act of civil disobedience.’

Cagle criticizes what she calls “a steamroller approach to laws and regulations that protect workers and consumers.” And with hundreds of millions of dollars in investor money, these companies do have a strong incentive to break things first and fix them later.

Whether Airbnb dinner parties really have the potential upend the restaurant industry is far from certain. Other startups have tried to do “dinner sharing” with limited success. But none of those have the scale or the name-recognition of an Airbnb, which is why any move by the company into new markets is worth watching. Airbnb is among a handful of companies that really has managed to upset the seemingly natural order of city economies. Like Uber with taxis, Airbnb found a powerful way to harness the internet to show there was a different way of getting a room, a way that a lot of people have decided is better than the old way.

That same improvement doesn’t seem as obvious with dining. Eating at a place that has met basic health and sanitation guidelines seems better than eating at one that hasn’t. There are plenty examples of the ways government abuses the concept of the public good to prop up needless bureaucracies and protect entrenched interest, but sending around inspectors to make sure rats aren’t pooping in the soup isn’t one of them.

Power Sharing

But if Airbnb’s experiment does take off, the company will certainly find itself facing down the restaurant lobby, a powerful player in food-crazy San Francisco. To win that contest, Airbnb would have to solve what in a way becomes a design problem: how to create a user experience so compelling that the public objects to the idea of losing its dinner-sharing options.

In the end, Airbnb may decide it doesn’t have the appetite for yet another fight. While facing off against New York’s Attorney General, for example, over the state’s lodging regulations, the company also entered into agreements with city leaders in San Francisco and Portland, Oregon, to start collecting and remitting hotel taxes on behalf of its hosts. “Our goal is to become even better partners with more and more cities over the coming months and years,” Chesky writes in his “Shared Cities” post.

Over the next few years, especially if Airbnb goes public, it will be intriguing to see how much the company takes this “go along to get along” approach versus a more antagonistic line. As the sharing economy evolves, cities, citizens and companies like Airbnb will struggle to work through not just the rules around the sharing of rooms, rides, and meals, but the competing priorities that end up defining the sharing of rights and responsibilities.